So far the numbers for the peak shopping season look like a major win for online retail. But as exciting as they seem, they don’t yet account for that other dreaded winter tradition — the holiday return cycle. And for fashion retailers, there’s reason to believe an even more frenzied period of merchandise returns awaits them.
Consider this: While online stores broke records at the start of the season, traffic to physical stores fell short. Brick-and-mortar retailers saw 1.7 percent less in-store visits on Black Friday than the same day last year, according to ShopperTrak data. In other words, more shoppers are buying online and fewer are filing into physical stores — and subsequently their fitting rooms.
The numbers seem to amplify an already challenging scenario for apparel stores: Fit is a major cause of clothing returns, and if a greater number of consumers aren’t trying things on before buying, then they may be more likely to send them back. Add gifting to the mix, with well-meaning loved ones resorting to guessing recipients’ sizes, and a meaningful chunk of those impressive early sales are poised to vaporize.
According to Joaquín Villalba, cofounder and chief executive officer of retail analytics company Nextail, holiday returns may reach up to 30 to 40 percent of all items sold, compared to only 8 to 10 percent for physical stores or 20 percent for online stores during the rest of the year. In particular, he said, “trend-led products can expect to see the highest returns.”
Processing returns is a tough and expensive proposition at any time of year and for retailers of all kinds. But the holidays are particularly painful for e-commerce fashion purveyors. According to a new survey by BodyBlock AI, a fitting technology firm for the apparel sector, half of Americans expect to return online clothing orders this season because of poor fit.
In polling 1,200 online shoppers in the U.S., the company discovered that as many as 72 percent have returned ill-fitting garments, and of first-time customers trying out a brand, 45 percent said receiving inaccurate or mistaken sizes would turn them off from shopping there again.
“Brands have been playing a costly guessing game when addressing the sizing and fit of their customers for decades,” said BodyBlock AI ceo Greg Moore, whose company aims to help stores tackle this issue. “If apparel companies don’t rethink their strategy, they will continue to hemorrhage billions of dollars every year in returns and dissatisfied customers.”
It’s a pervasive problem. The survey found that 91 percent has experienced trouble with fit in online shopping, and despite nearly three-quarters using fit predictors and size charts, as many as 37 percent still regularly buy multiple sizes of an item to ensure they find the right one.
This is precisely the scenario that fitting technology companies like BodyBlock AI, True Fit and others are built to address. But as much headway as they’re making, there’s still no single universal platform or standard for sizes, which makes online clothes shopping a game of chance.
Services like Stitch Fix and Amazon’s Prime Wardrobe aim to stack the odds more in consumers’ favor. By shipping boxes of products so customers can try before they buy, as well as keeping tabs on preference data, they’ve established infrastructures geared toward assisting remote shoppers, while efficiently managing steady pipelines of rejected items.
But even if their algorithms work perfectly, neither of these services cover every brand — and in Amazon’s case, not even every fashion item in its own marketplace.
Until such tools and services become more commonplace, shoppers can, have and will buy outside of these models. And during a time when sales are rampant and gift-givers must “guesstimate” sizes, those pesky fitting hiccups will morph into wide-scale, post-holiday attacks on revenues.
That may be a bitter pill to swallow after such a gangbuster opening to the season. Adobe Analytics reported that online Black Friday and Cyber Monday sales soared to $14.12 billion, nabbing a 20 percent gain over last year. But it’s very likely those numbers will begin their downward slide as soon as December 26.
According to Nextail’s Villalba, the threat to online merchants that deal in high-trend, but affordable apparel is especially high — which makes sense, considering they’re essentially impulse purchases. His advice: “Fast-fashion retailers can focus on minimizing the rate of returns via tactics like styling guides, detailed fit information and variable shipping and returns costs.” Purchases over a certain amount could qualify for free shipping, while others incur delivery costs.
Also, he advises examining the threshold when processing a return costs more than the item is worth. In that case, he said, consider refunding the money, but still letting the shopper keep the item.
Companies with both e-commerce and brick-and-mortar businesses face an extra challenge: Many of those online purchases — the ill-fitting pants, the shirt gifted in the wrong size, the unsuccessful multiples of a single dress — are destined to wind up overburdening local customer service counters and stock rooms.
In other words, the earlier downslide in foot traffic at physical stores may be headed toward a hard flip once the holidays are over. But, unfortunately, in all the wrong ways.